RBI monetary policy is a stepping stone towards policy normalisation

Growth commentary is more positive than last policy with rural demand expected to be resilient, exports expected to continue to do well and pick-up in the long awaited capex cycle

The monetary policy committee (MPC) of the Reserve Bank of India (RBI) has kept rates on hold and also decided to continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis. However, this policy had many more nuances that foretell the shape of things to come.

While the fiscal 2021-22 (FY22) growth forecast has been retained at 9.5 per cent, there is a shift with Q1 growth revised upwards to 21.4 per cent (18.5 per cent earlier). Growth forecast for the remaining three quarters has been lowered. Growth commentary is more positive